Medicare

07/28/2018

In many U.S. families, children and parents are going to be switching roles. As parents age, they’re becoming their own kids’ children in many ways, requiring time and care, as well as sometimes creating a financial burden, says Fox Business in the recent article, “Aging parents are the new ‘children.’”

One concern is that aging parents can lose their mental abilities. The Alzheimer’s Association says that every 65 seconds, someone in the U.S. develops the disease. It’s now the sixth-leading cause of death. This can create additional long-term care needs for parents and result in an emotional and financial burden on adult children.

Parents with physical limitations may have difficulties living independently. Therefore, you should understand your parents’ long-term plans and how they will impact you. Let’s examine some of the things you can do, as your parents go through the aging cycle.

Family Conversations. While talking to your parents about these topics now may be uncomfortable, it will save you a lot of stress, time and money in the future. Parents who want to preserve autonomy should express their wishes. Parents should discuss their healthcare wishes, the what ifs and finances now to discover what options they may have for care. It’s important that adult children understand details of their parents’ financial situations, before they’re unable to communicate due to incapacity or death.

Get the Family Affairs in Order. Create a system to help with gathering information. This should include medical histories and estate plans. Start to organize information with your parents as early as possible. Adult children should be sure that their parents have a will, a trust (or both), a durable power of attorney for property and a durable power of attorney for healthcare.

Determine Parents’ Long-Term Financial Needs. It’s extremely expensive to provide care for aging parents. Seek professional guidance to determine how much of your parent’s savings is currently allocated to pay for healthcare in retirement, not covered by Medicare. Look at long-term care insurance.

Be Involved. As parents age, look for signs of anything that might be amiss. If you aren’t near your parents physically, or perhaps need additional assistance, you may want to get someone to help you with the care management of your parents. An aging-care support person can go with your parent(s) to doctors’ visits, act as liaisons with care facilities and provide you with regular reports.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

Institutional Facilities or Care at Home. In some instances, nursing homes and retirement homes appear to be the only options available for care. However, the elderly can suffer significant emotional trauma when leaving their long-time homes and familiar surroundings. Research has shown that they do better, when they stay in their homes and familiar communities with friends and neighbors.

Finding a Home Care Agency. They offer different levels of service, so you can select an agency that offers more than basic homemaker services. Eventually, your parent may need personal care services. The agency you select should be bonded, insured, and licensed (although not all states require home care licensing). Caregivers should be experienced and vetted with at least a basic criminal background check. You should meet with the caregiver, before you agree to services. It is also important to choose an agency that complies with HIPAA.

Affording the Care Required. Since home care services are non-medical, they aren’t covered by Medicare. Home care services are generally paid individually or by long-term care insurance (LTC).

One solution to covering these costs is a reverse mortgage, which lets your parent access funds from their home equity, without disturbing their income. In addition, eligible veterans and their spouses may qualify for the Disability Pension for Aid and Attendance. That program provides funds for in-home care.

If you are still undecided on whether a loved one needs care, consider these questions to help you make a decision:

Does your parent need help walking?

Has his or her physical and/or emotional health been declining?

Is he or she able to prepare nutritious daily meals?

Can your loved one get out and shop at a store?

Can he or she manage bills and financial responsibilities?

Is he or she taking medications on time?

Can your parent drive safely?

Is he or she in need of companionship?

Does he or she need help dressing or grooming?

Long-distance management of a parents care can be exhausting. Try to get help from other family members. If your parent is suffering from a specific illness like Alzheimer’s, ALS, or a stroke, contact the local association/support group.

You should also use the services of a care manager and an experienced elder law attorney. Most importantly, stay in touch with your loved one and his or her support group.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

12/09/2017

“Marriage after age 50 is a wonderful thing, but it also has some financial challenges.”

There are numerous money myths that you’ll hear when you consider getting married at midlife, particularly if your spouse-to-be has children from a first marriage. Here are six common myths from Forbes’ recent article entitled “6 Money Myths About Marrying After 50”:

1: Prenups Are Just for The Rich and Famous. This is not true. If you’ve been married before and have children from a previous relationship, a prenuptial agreement is important to ensure that your assets will pass to your children from the prior marriage. What about a first-time marriage? There still might be a need for a prenup, especially if you own significant assets. Don’t think of a prenup as preparing for divorce, but rather more like writing your will. If you don’t have your affairs in order, the state will decide for you—just like dying without a will. After age 50, the focus of a prenup should be on protecting your children and grandchildren. For instance, some states allow a surviving spouse to claim his or her “elective share”, instead what’s in the decedent's will. A prenup allows your spouse to waive the elective share. That means the odds are that your estate plan won’t be challenged by your surviving spouse.

2: Don’t Talk Estate Planning with Your Stepfamily. Estate planning is critical when you have children from an earlier marriage. Otherwise, your entire estate could pass to your new spouse and not to your own children. Have a candid discussion about your estate planning and prenup with your adult children and your new spouse. This will alleviate some of the concerns adult kids may have about how it will affect their inheritance, when their parent gets remarried.

3: Holding Assets Jointly Is Always Preferable. Long before getting married, couples should decide on whether they want to have separate or joint accounts and if one will sell his or her current home. If one of you sells their home, will the deed to the house you live in be changed to reflect join ownership? It is best to have these discussions before the wedding ceremony.

4: Your New Spouse’s Debt Won’t Impact You. This is a big one. Marrying a person with a large amount of debt, whether it’s college loans or credit card debt, can be a major issue in second marriages. Therefore, spouses should be upfront and candid about their debts before marrying. That way they can plan how to address the debt.

5: It Always Makes Financial Sense to Get Married. This is not always true. It depends on your personal and financial circumstances. Tying the knot may reduce your Social Security benefits, especially if you didn’t work while you were married the first time and can claim spousal benefits that are much higher than your own Social Security benefits. If you have an ill or disabled partner on Medicaid, then you might want to stay unmarried so he or she can to continue to qualify for benefits. The combined marital income might make your partner ineligible for Medicaid.

6: Your Spouse Automatically Has a Right to Make Your Medical Decisions. This statement is not true. If there’s no advance health directive in place that details your wishes regarding end-of-life care, it’s not a certainty that your new spouse will be able to make medical decisions for you or tell your doctor what treatment you’d want. You should be clear in writing what your wishes are, so your new spouse and your adult kids will not fight over your care. Talk with your new spouse and your adult children, so they know your wishes and set up an advance health care directive. This should be part of your estate plan, which should also be revised to reflect the new marriage.

11/20/2013

The nation's elderly and disabled Social Security recipients will receive a 1.5 percent increase in payments in 2014. The same COLA will apply to pensions for federal government retirees and most veterans.

According to recent news from the Social Security Administration, the Cost Of Living Adjustment (COLA) made to Social Security payments will increase 1.5% in 2014. Although it is a small increase, you will be able to enjoy some "diet COLA" with your Social Security next year.

The COLA is an important adjustment for many Social Security beneficiaries, especially those on a fixed income. These can be very important dollars and cents. If costs of living go up on an annual basis, then Social Security beneficiaries would be left with fewer dollars to purchase more expensive goods (and services) without the COLA increase.

On a positive note, this COLA increase is welcome. Historically, there have been years without any COLA increase. That noted, at 1.5% the 2014 COLA is still less than the 1.7% COLA in 2013, which some regarded as too low.

The math, as summarized by ElderLawAnswers, works out like this:

Starting in January 2014, the average monthly Social Security retirement payment will rise from $1,275 to $1,294 a month for individuals and from $2,080 to $2,111 for couples. The 1.5 percent increase will apply to both elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits. The maximum Social Security benefit for a worker retiring at full retirement age, which is age 66 for those born between 1943 and 1954, will be $2,642 a month.

The good news is that it is not all bad news. While the SSA is seeing a lower COLA, it is worth noting that Medicare Part B will not be seeing an increase from the 2013 standard monthly premium of $104.90. In the end, then, for many beneficiaries 2014 might not be too unreasonable.

If you would like to create or update your estate plan, call our office today to schedule time for us to talk.Our office is located in Santa Ana, CA but we serve all of California including Irvine, Tustin, Newport Beach, and Anaheim.

If you would like to create or update your estate plan, call our office today to schedule time for us to talk.Our office is located in Santa Ana, CA but we serve all of California including Irvine, Tustin, Newport Beach, and Anaheim.

10/23/2013

For many people, the basics of estate planning are simple enough, but for those families with loved ones who are disabled or have special needs, the estate planning process is more involved – and definitely more critical.

The latest statistics show that five percent of minor children have some sort of disability, and the burden of caring for these children make estate planning essential. In addition to specialized health care, these children usually need special schooling and intensive therapy, all of which comes at a cost.

Here are some tips for parents facing the need to plan not only for their own financial future, but for that of a special needs child:

Deal with expectations. Parents need to think about the kind of life they envision for their child. Will the child have a shorter life span? Will he or she be able to work or live independently? The answers to these questions will form the foundation of your plan.

Determine eligibility for public benefits. In order to meet eligibility requirements for Medicaid and Social Security Supplemental Income programs, a person with special needs or other disabilities cannot have more than $2,000 in assets. This makes it imperative that a child who could benefit from these services not have any assets titled in his or her own name – meaning they should not be listed as beneficiaries on life insurance policies, retirement accounts or plans, in trusts, wills or pensions.

Consider a special needs trust. Assets placed in a third-party special needs trust are not counted as assets toward public benefit program eligibility, but these trusts are governed by strict rules so the counsel of attorney in establishing this trust is necessary. Parents who are unable to fund a special needs trust with cash while they are still alive can do so through life insurance proceeds after they die.

If you would like to have a talk about protecting your family through estate planning, call our office today to schedule a time for us to sit down and talk.

08/01/2013

Promissory notes can be a valuable tool in Medicaid planning, as illustrated by a recent federal district court case.

When it comes to ensuring proper care for your elderly loved ones, Medicaid can mean a world of difference … especially when your loved ones are running out of assets. So when their key remaining “countable” asset is illiquid, what options do they have short of draining it or risking an illegal transfer?

As you may well know, Medicaid is the source of nursing home care for many indigent Americans. Still others are caught in a netherworld of being above the minimum asset threshold for qualification, but having too few assets to realistically pay for their care. It’s a sticky situation.

The focus of the article is a recent federal case out of Oklahoma, but the basics apply generally. Essentially, an elderly woman transferred her farm and accounts to her son in exchange for a promissory note. A note is a legally binding contract to repay as fixed sum and so it clears the Medicaid hurdle in question.

In this instance, this approach indeed saved the farm and the elderly woman received her nursing home care through Medicaid. Nevertheless, a promissory note is not a full-proof plan. For one, many states reject the idea and refuse to recognize promissory notes. For another, the plan can only work because promissory notes are legally binding contracts, and so if the note cannot be repaid there are potential tax burdens that may be triggered.

The article also points out there are several tools, like the promissory note, that can prove useful when seeking legitimate Medicaid qualification. This especially is true if you plan well in advance.

Danger! The Medicaid qualification rules vary from state to state. This is not a self-help project, as you may find yourself (and your elderly loved one) in a tricky financial and legal purgatory if you make any missteps.